European antitrust regulators have approved a deal that would see Farfetch enter a joint venture with Richemont to take ownership of rival luxury e-commerce platform Yoox Net-a-Porter.

Under the agreement, announced in August 2022, Richemont would sell a 47.5 percent stake in YNAP to Farfetch, with provisions for a full acquisition in the next three to five years. Emirati business mogul Mohamed Alabbar will acquire 3.2 percent of YNAP, reducing Richemont’s stake to below 50 percent and allowing it to remove the loss-making e-commerce platform from its balance sheet.

European Commission approval was one of the final procedural hurdles to completing the deal, following approval by UK regulators in April.

For Richemont, the deal offers a way to offload YNAP, which has been dragging down the Swiss group’s valuation despite the strong performance in its core luxury watches and jewellery business, which includes Cartier, Jaeger-Le Coutre and Van Cleef & Arpels. The implied valuation of YNAP at €1 billion when the deal was announced meant Richemont was taking a nearly €3 billion write-down on the asset.

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✍️ Malique Morris